Well, it's really just a metaphor, because what he means is that Dean is the intended vessel for Michael to use when he returns and wages his war against Lucifer. Dean doesn't exactly enjoy the notion of being a meatsuit (or an "angel condom," as he so eloquently puts it).

But Zachariah doesn't care, so he plays some fun and games like breaking Sam's leg, threatening to paralyze Bobby, giving Dean stomach cancer and then taking away Sam's lungs. Wow, angels can do a lot. Dean still refuses, and just when all hope is lost, a flash of light appears and it's...CAS!

Yes, just like all the Winchesters, Cas comes back from the dead and starts killing angels left and right. Apparently he grew some big brass balls in the after-afterlife. He then gives Zachariah a message, that something (or someone) brought him back to life and teleported the Winchesters onto that plane, and it wasn't an angel.

Zachariah is thinking what I'm thinking: this is the work of God! Clearly God has a soft spot in his heart for Dean, so Zachariah gets the heck out of there. The boys are happy to see Cas alive and well, but he warns them that Lucifer has almost found his ultimate vessel.